Gov’t’s statement on tax measures downplays burdens on taxpayers

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Opposition Leader, Bharrat Jagdeo has dubbed the Department of Public Information’s (DPI) statement; ” improved tax measures will inject $9B into economy” as “nothing more than a pathetic attempt to justify and defend the humongous tax burdens that this budget places upon the back of every single Guyanese.”

Below is the full statement;

Office of the Leader of the Opposition responds to government’s claim that ” improved tax measures will inject $9 billion into economy”

As criticisms continue to mount upon and overwhelm the National Budget 2017 and not being able to sensibly respond, senior members of the Government have gone mute and are now relying upon their junior spin doctors to defend the indefensible.

Our attention was drawn to a most lopsided and self-serving piece of propaganda recently disseminated by Imran Khan, Director of Public Information, Department of Public Information. It is nothing more than a pathetic attempt to justify and defend the humongous tax burdens that this budget places upon the back of every single Guyanese, whether in the public, or private sector.

The statement details the costs to the Treasury of reduction of VAT, reduction of Personal Income tax, reduction in Corporation tax and increase in the VAT threshold. The total cost to the Treasury is given at $9,595,000.

Obviously, this is only a fraction of the story. The statement deliberately omits to calculate the windfall in revenue that VAT will generate, on electricity, on water, on basic food items, on educational materials, on pharmaceutical and health supplies and on services, such as internet, school fees, educational and health services and a host of other goods and services that are not currently Vatable.

The statement also omits to recognize the billions of dollars which will be collected from the increase of Personal Income Tax from 30% to 40% and on allowances; the increase in Travel Tax, the increase in Corporation Tax, a new Environmental Tax and a host of other new tax measures.

The statement deliberately refuses to allude to the billions of dollars that will be generated by the increase of fees in over 50 different areas, including, increase fees for late filling of Personal Income Tax, Corporation Tax, Property Tax returns, increase in interest rate for late payment of tax, astronomical increase for fines for failing to keep proper tax records, new and higher fees for passports, higher fees for driving permits, higher fees for certificates of compliance, increase in several dozens of fees under the Customs Act, increase in a number licensing fees and the imposition of a 2% tax on contractors.

 

The statement further deliberately failed to disclose the billions of dollars that will be received from Government spending which now attracts VAT.

In fact, at page 73 of his budget speech, the Minister said that “tax revenue is expected to increase by 8.9 % to 162.6 billion, reflecting a considerable increase in collections of VAT due to the measures to be implemented in 2017.” No amount of propaganda from any spin doctor can change and distort the very clear language of the Minister himself.

We estimate that conservatively; the Government will receive an increase in taxes of approximately 25 billion dollars in VAT alone.

The Government as part of its attempt to deflect criticisms has created a new app (a salary calculator) to help citizens calculate their salaries under the new measures imposed by the budget. What the calculator will never tell the citizen is, what is the real spending power of his/her salary as a result of this budget. The calculator does not tell the citizen that their allowances are now subject to tax. This new calculator will also never tell the citizen by how much their cost of living has skyrocketed as a result of this budget.

So on top of a draconian and an inhumane budget, the citizens of this country at the same time have to cope with insensitive and idiotic attempts by the Government to insult and mock their collective intelligence.

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